Newbie Seeking Guidance

[Eric Espindola]

Good Morning Everyone 

Since I am new to the world of real estate investing I need guidance on what is the step by step process you seasoned investors have taken to buy a property. I have read plenty of books on real estate investing, especially in buying and holding topics. 

My main goals are to 1st to seek a mentor that can show me the ropes of real estate investing. Buy and hold my first property. Create my Wyoming LLC to have asset protection. Rent out the property to my first buyer and maybe have an option for them to buy the property.

I would greatly appreciate if seasoned investors can share their knowledge on what it takes to make their first deal. 

[Jerry W.]

@Eric Espindola, the first thing you really need to do is learn the market you will buying in.  Until you know how much a 3 bedroom house sells for in a specific neighborhood and what it rents for how will you ever know what is a good deal or a bad one?  Start looking at everything that is for sale and seeing what prices different sizes of houses sale for in different neighborhoods.  You can do the same with for rent adds in newspapers, online, and at property management establishments.  If your state posts sale prices at your local county assessors office look them up.  You will never magically know what a house is worth.  You must view enough to get an idea of what your local market is doing.  Then you need to figure out what ratio of rent to price you can make money at.  Figure out the yearly taxes, insurance mortgage payment.  Then add in what the local vacancy rate is say 8% then maybe 10 or 15% for repairs, and at least 5% for capital expenditures.  You may even want to add a 10 percent management fee.  If houses selling for $100K rent for $500 per month you will lose money, if houses that sell for $100K rent for $1700 per month you will make a lot of money renting.  Learn your local market and learn how to estimate the cost of fixing up junky places so you can get higher rent.  local knowledge is key.